• What Is Home Equity, And How Can You Build It Fast?

      image of a scale house, calculator and contractsEquity is the actual value of your property calculated when you take out all the liens on it from its market price. If the perceived value of your house is PhP1 million and the remaining balance on your mortgage is PhP700,000, then the equity you have is PhP300,000. In other words, you own 30% of it.

      Just go to sites such as landpricelist.ph — you’ll see that any Lancaster New City review would advise you to build equity in your house as fast as possible. It could provide you instant cash for future financial needs, such as expensive medical expenses.

      If the property crashes, having large equity would keep your mortgage balance from exceeding the market value of your house. This way, you wouldn’t lose money if you decide to sell it. Here are four of the best ways to build equity in your house more quickly:

      1. Buy a property in a hot real estate market

      Property price appreciation builds home equity passively. To benefit the most from this, buy a house in a healthy real estate market. Usually, these are well-developed, highly populated areas. Outside Metro Manila, residential properties in CALABARZON provinces are your safest bets.

      2. Prepare a large down payment

      When buying a house, your down payment directly translates into equity because it comes out of your own pocket. Even if your lender’s loan-to-value ratio maximum is 90% or higher, take time to save so that you borrow less money and have a lot of equity on your house upon receiving the key.

      3. Pay your housing loan off faster

      If you may, make mortgage payments in between due dates without incurring penalties. Extra payments go toward the balance, reducing the amount you owe on your house faster.

      If you pay half your monthly amortization every other week for one year, you will end up decreasing your mortgage balance by one month’s worth of payment after a year.

      Whether you plan to stay in your house for good or put it on the market after some time, take building home equity seriously. If you make the right moves from the start, the great value of your property might come in handy down the road.